The strategic choice of China’s gold reserve under the new monetary environment — Sohu financial ma-visualboyadvance

The new currency under the environment of the strategic choice of China’s gold reserve of the Sohu financing of RMB in the SDR currency basket (SDR) has been settled, which represents the yuan into a global reserve currency is an important step, is also a milepost in the process of RMB internationalization. A move with this, since July 2015, China adopted the IMF special data dissemination standard (SDDS), began to publish monthly economic data such as gross gold reserves, gold reserves to establish normalized release mechanism, to increase policy transparency, improve Chinese influence. From the perspective of gold reserve, as a currency form of super sovereignty, gold reserve can provide invisible guarantee for the value of its own currency, and enhance the recognition of its currency as an international means of payment. It is an important component of the diversification of currency reserves. The current monetary environment and gold reserves in 2008 the financial crisis and ensuing global slowdown in economic growth, have repeatedly indicated that the current international monetary system has defects, although the United States and the euro area monetary prospects vary, but adverse effects in order to cope with the economic crisis, the monetary and fiscal authorities are actively taking measures, unprecedented efforts. At the same time, too many stimulus measures have also contributed to the rapid expansion of the central bank’s balance sheet, which constitutes a major threat to the instability of the world monetary system in the future. From November 2008 to October 2014, the United States pioneered the quantitative easing (QE) policy, and implemented a total of three rounds of QE within 6 years, injecting huge liquidity into the market. Admittedly, QE has played a positive role in maintaining low interest rates and stimulate consumption, stimulating the growth of GDP and enhance the asset price, but also led to the rapid expansion of the Federal Reserve bank balance sheets, from $2 trillion in November 2008 rose to $4 trillion and 500 billion by the end of 2014, the assets and liabilities of the scale of more than 1 fold, a 3 round of QE to stay the most direct results". Comparatively speaking, the gross domestic product (GDP) growth rate in the past 6 years was 18%, and the "great leap forward" of the monetary policy laid a hidden danger for the future inflation. Holding a large number of long-term bonds also caused difficulties for the future Fed’s balance sheet "downsizing". At the same time, the United States QE policies have a significant impact on the global monetary system, Britain, Japan and the European Central Bank in order to stimulate the economy and prevent the impact of QE spillover benefits, avoid currency appreciation, but also continue to follow the Fed launched the pace of quantitative easing monetary policy. From August 2008 to September 2015, the Fed’s balance sheet has expanded by 392%, the Japanese central bank balance sheet expansion by 233%, especially since 2013, Andouble came to power after the rapid expansion of the bank balance sheet expansion; 321%; the European Central Bank QE opened since 2014, the balance sheet is also pre crisis expansion 81%. At the same time, the total asset size of China’s central bank also increased by 64%, close to 33 trillion RMB level. From 2009 to 2014, China’s foreign exchange reserves grew by nearly 2 trillion US dollars, which was different from the previous trade surplus, which led to the rise of foreign exchange reserves, because the interest rates in China were higher than that of the international market for a long time.